session 50-
DESCRIPTION
Session 50-. 1. Session 50. Master Promissory Note. What is an MPN?. Promissory note used to make one or more loans for one or more academic years (AYs)-- Dollar amount not tied to note Covers up to allowable maximum amounts Amounts may be adjusted upward within same AY without new MPN - PowerPoint PPT PresentationTRANSCRIPT
Session 50- 1
Session 50- 2
Session 50
Master Promissory Note
Session 50- 3
What is an MPN?
Promissory note used to make one or more loans for one or more academic years (AYs)--– Dollar amount not tied to note– Covers up to allowable maximum amounts– Amounts may be adjusted upward within same
AY without new MPN– Single-year and multi-year use for originating
new loans
Session 50- 4
Current MPN
For sub/unsub loans only For 00-01 and 01-02 use MPN with--
– OMB #1845-0007– OMB Expiration Date 8/31/2002
Session 50- 5
Related MPN Documents
Disclosure Statement– Provided at or before first disbursement of
each loan under MPN Borrower’s Rights and Responsibilities
– Provided with each MPN Plain Language Disclosure
– Provided with Disclosure Statement for subsequent loans under MPN
Session 50- 6
MPN Brochure
“The Inside Scoop for Borrowers”– Answers questions about the MPN for DL
borrowers– Revised in Summer 2000– DLB 00-36 provides ordering information
Session 50- 7
Single Year Use
One or more loans for same AY made under one MPN--– All schools eligible– Need new MPN each AY– Need new MPN for all transfer students
Session 50- 8
Multi-Year Use
Loans for more than one AY made under one MPN--– 4-YR and graduate/professional schools
currently eligible– Do not need new MPN each AY– Need new MPN for transfer students without
Direct Loan MPN – Must have confirmation process for loans in
subsequent AYs
Session 50- 9
Expiration of Multi-Year Use
Loans for multiple AYs may no longer be made under an MPN after earliest of--– Date DLSC or school receives borrower’s
written cancellation of authorization– 1 year after date of 1st anticipated
disbursement if none made during period– 10 years after date of 1st anticipated
disbursement
M-Y Use
Session 50-10
Eligible Schools
“Highest Educational Program Offered” on page A-2 of ECAR is--– Master’s Degree or Doctor’s Degree– First Professional Degree– Professional Certification– Bachelor’s Degree
Not subject to emergency or LS&T action
M-Y Use
Session 50-11
Confirmation: Development
Confirmation process--– Replaces signing MPN for loan in new AY– Ensures borrower control and increases
borrower understanding of loan debt – Is determined by school– May be part of--or can supplement--existing
required notices/disclosures– May be active or passive
M-Y Use
Session 50-12
Confirmation: Active Process
Borrower must take action to accept/confirm loan
School may not disburse until borrower responds
Examples:– Signed award letter– Electronic acceptance through PIN
M-Y Use
Session 50-13
Confirmation: Passive Process
Borrower takes action only to reject or change loan
School may disburse after notifying
Examples:– Award letter with no signature required– Disclosure Statement
M-Y Use
Session 50-14
Confirmation: Multiple Processes
General--– School should use same process for all
students In some cases--
– Administrative procedures and/or school’s best judgement on informing students of loan obligation may require more than one process
M-Y Use
Session 50-15
Confirmation: Multiple Processes
Example:– Undergraduates required to attend individual
counseling before receiving aid– Graduate students not required to attend
counseling– School may have two processes--
• Counseling for undergraduates• Different process for graduate students
M-Y Use
Session 50-16
Confirmation: Documentation
School must keep description of process(es) in effect for each AY in which it makes subsequent loans under MPNs
Ideal
M-Y Use
Describe process(es) in student handbook or other financial aid publication each AY
Session 50-17
Confirmation: Documentation
Description--– May be kept in paper or electronic format– Need not be kept in borrower files– Must be kept indefinitely– Must be submitted to ED upon request if
borrower challenges loan enforceability
M-Y Use
Session 50-18
Confirmation: Documentation
Example:– School uses active process of collecting
signed award letters in 00-01 AY– School includes description of process in
00-01 student handbook – School may do one of two things--
• Keep paper or electronic copy of handbook• Keep some other paper or electronic record of
process
M-Y Use
Session 50-19
Canceling Authorization for Multi-Year Use
Borrower must provide written cancellation notice to DLSC or school– Explained in MPN, PLD, & brochure– If school receives, it forwards to LOC
If borrower cancels--– Remaining disbursements on existing loans
accepted– Additional loans require new MPN
Session 50-20
New MPN Initiatives
Electronic Signature PLUS MPN
Session 50-21
Ways to know if LOC has a valid MPN
For 1999-2000 and 2000-2001– NSLDS– LOC sends an origination record back with the
MPN ID For 2001-2002
– There will be a flag on the ISIR record
Session 50-22
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MPN Processing
Session 50-23
MPN Changes for 2001-2002
Session 50-24
MPN ID Eliminated
The 21-character MPN ID has been replaced with a 1-character YES/NO flag on the LOR Acknowledgement
“Y” if the LOR is linked to an MPN at the LOC “N” if the LOR is not linked to an MPN at the LOC MPN acknowledgement will retain the MPN ID
Session 50-25
Single Year
Must collect a new MPN for each academic year
The LOC will analyze the LOR to determine if a new MPN is needed– compare the academic year on new LOR to
first LOR
Session 50-26
MPN Multi-Year Use Expiration
The MPN will be analyzed to determine its availability for multi-year use
The expiration date:– 12 months after receipt if no LOR is received
at LOC– 12 months after first anticipated disbursement
if no actual disbursement activity has occurred– 10 years after first anticipated disbursement
Session 50-27
MPN Multi-Year Use Expiration
The LOC will link LORs to MPNs if the loan period start date is before the MPN expiration date
The LOC will return a “No MPN on file” status if the loan period start date is after the MPN expiration
MPN expiration date will be displayed on the WEB
Session 50-28
Change Notification
When a borrower requests that the LOC close his/her MPN, the LOC will notify Direct Loan Servicing with a status of “C”
If an MPN is closed by mistake and the LOC will re-open the MPN and notify the DLSC with a status of “A”
Information reported to NSLDS by Servicing will be made available to schools via the ISIR or NSLDS website
Session 50-29
Loan Origination Contacts
E-Mail Address:– [email protected]
School Relations at the LOC:– 1-800-848-0978
School Relations Fax:– 1-800-557-7396
School Relations at the Servicing Center:– 1-888-877-7658
Session 50-30
Don’t forget to complete your evaluations either on paper or electronically in the Cyber Cafe